AkzoNobel Denies Hedge Fund's Meeting Request

Coatings manufacturer AkzoNobel announced Tuesday (April 25) that it officially rejected a request by sharefholders to hold an Extraordinary General Meeting to discuss an ouster of the firm's supervisory board chair.

In a press release issued early Tuesday (April 25), the company detailed the review process under Dutch law noting that the supervisory board had taken “detailed legal advice” on the matter.

“AkzoNobel fully supports the rights that shareholders have under Dutch law,” the release read. “One of these rights is for shareholders representing at least 10 percent of issued share capital to request a general meeting as qualified by Dutch law. According to Dutch law, this includes meeting standards of reasonableness and fairness and a 'legitimate interest' test.”

Images: AkzoNobel

Dutch coatings company AkzoNobel has officially declined a shareholder request for an Extraordinary General Meeting.

On April 12, the company confirmed that they had received a request from shareholders, led by Elliott Advisors, to hold an EGM with the sole agenda item of dismissing Antony Burgmans as chairman of the supervisory board.

The board said Tuesday they found the request to dismiss Burgmans as “irresponsible, disproportionate, damaging and not in the best interests of the company.” Because that was the only reason for calling the meeting, the board denied the request, citing that there was no legal basis for an EGM.

Burgmans was first appointed to AkzoNobel's supervisor board in 2006. He is a former chairman of the Dutch-British consumer-goods giant Unilever NV.

"Following a thorough review and careful considering of this request the supervisory board reiterates its unanimous support for Mr. Burgmans in his role as chairman,” said Deputy Chairman Byron Grote. “His unique experience in international business and global transactions is crucial to the company. He has played an important role in overseeing and supporting management in the transformation of the company in recent years, contributing to its significantly improved performance. It is essential that the steady and experienced hand of the supervisory board and its chairman remains focused on the task of steering the company at this crucial time."

PPG extended its third offer to combine companies in the form of a letter to AkzoNobel CEO Ton Büchner (left) and Supervisory Board Chair Antony Burgmans.

AkzoNobel alleged that the shareholders had “intended to privately share potentially price-sensitive information with PPG” about the meeting request, and asked Elliott Advisors to clarify its relationship with PPG.

PPG, meanwhile, had fired back with its own statement, saying, “There has not been any, and there are currently no agreements or arrangements, in whatever form, between PPG and Elliott Advisors.”

Shareholder Support

AkzoNobel stressed Tuesday that it “strongly respects and greatly values its shareholders and regularly engages in an open and direct dialogue,” and added that within the last week the company held multiple meetings with shareholders in light of an investor day, shareholder roadshow and the company’s annual general meeting, held Tuesday.

"Today shows strong support from shareholders for all resolutions the company brought forward and reinforces our belief in the strong platform for growth and momentum the company achieved in 2016,” said Burgmans.